Recapping the Majors
EUR/USD– The Euro rallied after a disappointing day yesterday as it rose back up to the 3800 mark today. The pair has been somewhat stalled around 3750-3800 for the past few days which is making it difficult for technical traders to forecast a direction
Result: The Euro rallied rallied back up from 3750 as it hit 3800 for the 4th straight trading session.
GBP/USD- The Sterling rallied strong today as it rose 200 pips from 2.0200 to 2.0400. The pair had been in a slump for the past 2 days after falling from its 61% Fib line on the daily chart. Now the pair is trading just above its 38% Fib line on the daily chart at around 2.0365.
Result: The Sterling rallied strong today as it rose 200 pips to 2.0400 against the Greenback.
USD/CHF- The Swissy stayed pretty still today at around 1950 as both the bulls and bears tried to tug it in their direction. The pair rallied hard the past 2 sessions after it bottomed out just above 1800.
Result: The Swissy stayed pretty still at around 1950, forming an upper and lower bound at 2000 and 1900, but ending up right in the middle.
USD/JPY- The Dollar rallied nicely against the Yen as it broke through 119.00 and just pierced its 200 SMA at 119.70. The pair had been at a standstill between 118.00 and 119.00 for several days and has finally made a clean break of that range today.
Result: The Dollar rallied strong as it finally made a clean break of 119.00 and breaking out of its range.
Chart Analysis: What’s going to happen next?
On Monday I told you that if you were long on the Euro you might have to weather some retracement and that retracement took place yesterday but has rallied back strong today. Both 4hr and daily stochastics are trending up which is a good sign for Euro bulls and I would still look at 3850 as a suitable target.
I said that the Cable would drop slightly before rallying back on Monday and that’s exactly what happened. The pair rallied strong today and has cooled off a little late today. 4hr stochastics are still trending up and just entering overbought territory now so I think we may see a little more bullish movement in the short term. Currently the Cable is trading at around 2.0360 and I would watch for it to make another run to 2.0400.
The Swissy stayed put today which makes it hard to forecast a future direction. 4hr stochastics are trending down while daily stochastics are trending up. Currently the pair is at around 1950 and I think we’ll see the pair drop towards 1900 followed by another rally, which should break above the 2000 mark.
The USD/JPY rallied nice today but has now hit a resistance point at both the 100 SMA on the 4hr chart and the 200 SMA on the daily chart. Daily stochastics are still trending up so I expect more of an uptrend over the medium term, but 4hr stochastics are trending down which could indicate some short term drops. Look for the pair to fall to around 1900 before making another strong rally.